tv Nightly Business Report PBS December 22, 2014 7:00pm-7:31pm EST
this is "nightly business report" with tyler mathisen and susie gharib. funded in part by -- >> thestreet.com and action alerts plus where jim cramer and fellow portfolio manager stephanie link share their investment strategies, stock picks and market insights. you can learn more at thestreet.com/nbr. the holiday spirit. investors were in the buying mood sending the blue chips to record highs 50 times this year the s&p 500 has hit uncharted territory. should you be wary? deflated. natural gas prices plunge making many a home owner feel a little better about their winter heating bill. is this another shot in the arm for the economy? and what now? the president says north korea's hacking of sony is not an act of
war, so what options are on the table to deal with a rogue nation's attack on an american company? all this and more tonight on "nightly business report" for monday, december 22nd. good evening, everyone. more rallies and more records on wall street today. the dow and the s&p 500 closed at new highs as investors went on a buying spree on this holiday-shortened week. why all the enthusiasm especially on a day of weaker than forecast housing data and another sharp drop in energy prices? well, it looks like investors are still upbeat and hopeful about the markets going up in the new year on that federal reserve promise to be patient before raising interest rates. here's the tally at the closing bell today. the dow jumped 154 points, getting closer to the 18000 level. and with the blue chip utility index also setting a new record. the nasdaq was up 16 and the s&p added nearly 8 points posting its 50th record close this year. more now on the latest sharp
drop in energy prices after saudi arabia's oil minister said opec would not cut oil production at any price. and said they'd put even more oil out on the market if other nations scaled back on output amid tanking global prices. now today west texas crude fell nearly $2 a barrel, ending the session at 55.26. brent fell another 2%. it finished just above $60 a barrel. since june of this past year the price of crude has been cut in half, gasoline has tumbled now to a fresh five-year low, with aaa reporting that gas is averaging $2.39 a gallon nationwide. i got some for $2.21 today. now the third leg of the energy market, nat gas, appears to be headed in the same direction. natural gas futures plunged 9% today hitting a two-year low. that's welcome news, i suppose, on this first full day of winter, thanks to forecasts for warmer than average temps
through new year's day and record high production of gas. not so welcome, though, if you own natural gas stocks. take a look here. all the nat gas names got hammered today. chesapeake down did most, 7.25%. the move in natural gas is good news for u.s. home owners and more than half the nation's homes are heated with natural gas and its by-product propane. jackie deangelis has more. >> reporter: natural gas prices continue to plummet, a near 30% drop since last year and another leg down today closing in on $3. the action in nat gas is a supply -- demand story. but mother nature controlling demand and so far she's been on our side. this time last year we were talking about the polar vortex, now we're talking about 50-degree temperatures on the east coast on christmas. >> everything comes down to weather in natural gas. it's been very mild.
they're predicting in the short-term future here that it's going to stay mild, and with the north american shale production predominantly the appalachian gas, there is a lot of it. there's a big glut of it right now. >> reporter: the natural gas story with declines in propane in ten year lows and consumers will be paying a lot less to heat their homes this winter, then there's the decline in retail gas prices. consumers getting a big gift from the energy complex this year. aaa saying the national average 2.35, 89 cents lower than a year ago. low prices for gasoline are helping consumers to save more than $450 million a day on gas compared to the highs earlier this year. and that's great news heading into christmas as aaa expects nearly 100 million americans will travel 50 miles or more for the holiday season. that's the most on record. >> all great for consumers because there will be more money
to spend. you spend less on gasoline, you will spend it somewhere else. >> reporter: how low will we go? it could touch $3, a huge break from last year's highs over 6. and prices at the pump? difficult to say, but we could see many areas of the country dipping under $2 in the near future. michael farr joins us to talk about energy prices and the markets. he's president with farr, miller and washington. nice to have you with us. as you heard jackie say, you know, last year we're talking about the polar vortex and this year we've got warm temperatures for the holidays. is this sort of like a stimulus for the economy and a stimulus for the stock market? >> well, it has been certainly and wonderful to be with you. happy holidays, everybody. certainly these lower gas prices and lower fuel prices are helping the consumer. we're seeing more money left in the pocketbooks and it's estimates right now with current
gasoline prices are almost $750 per household in savings. so that money is going to go somewhere else. and we've got a gdp that's driven two-thirds by the consumer. this is a good thing for the economy generally. >> so michael, do you see oil prices and natural gas prices falling farther from here? if so, roughly how much? it feels like some of the decline has tapered off just a bit in the past week or so. >> it does, tyler. and it does seem to be slowing. you know, you never bet against a trend anywhere on wall street. and both of these trends are down and have been for a while. i thought that natural gas was beginning to look cheap when it broke below $5. i don't think i was wrong but it's gone cheaper. but i learned in 2008 from march 31st to about june 24th. we saw oil go up 47 1/2% in like 84 days.
everybody said it was going to 200 and the trend was going to continue. when a price of a global commodity moves 45, 47% in a short period of time, probably ought to think about selling it high and now that it's come down, we probably ought to think about buying. >> and what about buying some of these stocks that have been hit so hard, especially looking at natural gas prices? tyler was just showing the prices down, stock prices down sharply today. are there any quality names in that space that you would be buying? and also with big oil as well? >> well, i'm a chicken, as you guys know, so i have been looking at two companies. i've been looking at southwestern energy and i've been looking at cabot oil and gas. i'm going to stay away from both, but they're both 11, 13 billion dollar market caps and i think they're safer, but i'm not prepared to go there yet. i'd much prefer to own an exxon where about 47% of the company is still based in natural gas.
i get a aaa balance sheet with exxon and a 3% dividend. chevron, 32% still is in natural gas. i get a 3.8% dividend and i'm 14 times earnings. so i'd rather wade in with some of these much stronger balance sheet, much better diversified global companies and not take the big -- get paid while i wait. >> very good thought on 2015 in the market. we've got about 30 seconds. dep on ect a continuing u the fed. i'm going to look for about 10%, but will the fed actually blink and raise rates? i think the jury's still out whether they do it at all in 2015. >> all right, michael. that's a nice upbeat way to end this conversation. michael farr with farr, miller and washington. >> happy holidays. a recovery in housing today. existing home sales fell more than 6% in november, slowest
sales base in six months despikt attractive loan rates. the national association of realtors says the combination of stagnant wage growth and rising home prices have reduced affordability and held back some would-be home buyers. people signed up for health insurance under the affordable care act will be keeping a close eye on the u.s. supreme court on march 4th of next year. that's the date set just today for oral arguments in a case known as keen versus burrwell. this case will decide whether to void federal subsidies paid out to enrollees who didn't establish their own insurance marketplaces under the law. the battle to limit the sky high cost of treating hepatitis c is heating up after express scripts, that's the nation's largest pharmacy benefits manager, said it's no longer going to cover gilead's market leading sovaldi and halmani
medications. it will now include abbvie. companies taking a hit today, especially gilead, it was down 14%. could this exclusive deal by express scripts lead to lower costs and better access to treatment for subscribers? meg terrell has more. >> reporter: it's the battle that's been brewing for a year. a price war among drugs to treat hepatitis c. when gilead's sole vady was approved last year cured more with fewer side effects. it brought a price that raised eyebrows, $84,000 for 12 weeks of treatment or about a thousand dollars a day. the medicine has been a blockbuster, drawing more than $8 billion in revenue for gilead this year as well as the scrutiny of health insurer, patient advocacy groups and congress. on friday a competing drug abbvie's viekira pack.
>> a significant discount big enough to allow us recommending treating all patients with hepatitis c. >> reporter: more than 3 million americans have the viral infection. about three-quarters have the known known as type one. the virus can persist silently for decades before showing symptoms but in later stages can cause liver cancer and liver failure. some caution that doctors and patients may prefer gilead's version over abbvie's. >> a little bit higher pill burden, a little more side effe effects. >> r the news today e shares of gilead down significantly while boosting abbvie's. it weighed on the buoy o tech industry more broadly as many feared bigger price wars brewing. >> we think there's great opportunity to cross all those categories and we have to do
something because these prices have become unsustainable. >> reporter: global spending on medicine may rise to $1.3 trillion in 2018 according to imf health. contributing are specialty med since like those for hepatitis c as well as those for cancer and autoimmune diseases. the question now is how far will the price wars reach? for "nightly business report," i'm meg terrell. looks like russia is headed to a, quote, full blown economic crisis, that's what a former russian finance minister says following this year's plunge in the value of russia's currency the ruble and the strange that it's caused on its banking system following tough u.s.-led economic sanctions. today russia's largest bank suspended all requests for auto and new mortgage loans until at least the end of february and another roogts lender trust bank had to be bailed out by the government. russian oil giant terminated a deal to buy a business from morgan stanley blaming u.s. regulators for refusing to clear
the deal. now to the latest on the cyber attack at sony pictures. despite canceling the christmas day release of the satirical film "the interview" sony has done an about face saying the controversial movie will be shown. one report says it's coming to crackle, the studio-owned streaming service, another suggesting it will be released via sony's playstation gaming system. in a statement, sony pictures says no decisions have been made just yet. but the president has made his decision. he says the u.s. will, quote, respond proportionally against north korea, which the administration says is behind the hack attack and accompanying threats. just what those proportional actions are, though, has not been revealed. amon jabbers joins us with more on the cyber attack from sony and eamon, good evening. there are some reports of web disruption going on in north korea right now. any word on what's happening?
>> we don't know exactly what's going on in north korea right now. as you can imagine a fairly inpenetrable country, tyler. but late this afternoon researchers started reporting internet outages in north korea with ip addresses associated with the north korean government and north korean consumers is of the internet. you can imagine there's just not a whole lot on the internet in north korea, maybe a couple of thousand ip addresses, tops, but it does appear that there's some kind of disruption or outage of the internet ongoing now in north korea. >> so what is the u.s. or the white house saying about these new developments? >> well, i asked a white house national security council spokeswoman about this earlier and said did the united states do anything here to cause any of this outage? she responded to me by saying we don't have any announcements to make regarding north korea this afternoon. so no confirmation or denial here from the white house. >> be a shame if they can't shop on amazon here two days before christmas. what has the government said about the whole situation today?
>> they haven't said a whole lot, but we did see a new comment over at the state department where a spokeswoman there said that the north koreans might consider repaying sony for some of the damage that it's caused. she was asked exactly how much the north koreans ought to pay sony to make up for it. she didn't say. one of the problems with that would be as it stands right now, the sanctions regime against north korea would prevent sony from accepting a repayment check. the spokeswoman for the state department says they might be able to found a work-around for the sanctions for that if the north koreans decided to pony up the cash. >> such a difficult situation. are there any options on the table? how does this play out? >> there aren't a whole lot of good options, short of an all-out cyber war there are things they could consider including putting north korea back on the state sponsors of terrorism list, but not a lot of good options here for the obama administration as they look down the menu. >> thanks very much. >> you bet.
>> switching gears here. coming up, would you eat 3-d printed foods? some companies are betting you will. we'll explain right after this. the federal aviation administration is teaming up with the makers of drones on a new safety campaign to keep them far away from airplanes. with regulators expecting a whole lot of unmanned drones underneath christmas trees this week, it's launching a new safety awareness initiative along with the academy of model aeronautics designed to avert disastrous encounters with jets and other aircraft. the faa receives about 25 reports every month of drones sighted near manned aircraft. well, another setback to the
comcast/time warner merger is where we begin tonight's market focus tp. the federal communications commission has delayed reviewing comcast's $45 million deal to acquire time warner cable. officials say they need more time to review thousands of documents that time warner is expected to submit today. despite that, shares of comcast rose a fraction to $57.22. time warner was higher as well, up slightly to $150 and change. comcast is the parent company of cnbc which produces this program. we helped lift the dow with big order news. air china has ordered 60 boeing 737 jets. that adds up the a price tag of around $6 billion. the deliveries will run from the year 2016 to the year 2020. shares popped 1.99 to 128.22. shares of caesars rose after it agreed to buy its caesar acquisition. the financial reshuffle comes weeks before its main operations
unit files for bankruptcy. the move, it says, will help the casino operator restructure its debt. shares of caesars soared 11% to $15. caesars acquisitions also higher up 3% to 9.76. the embattled mortgage servicing firm fell after news that its ceo will step down as part of a settlement with new york's top regulator after a lengthy probe of treatment of homeowners. they'll pay a $150 million fine. shares down 27% on the day. they finished at $16.01. american apparel saw its shares rally after it confirmed that it has been approached with a buyout offer that comes a week after the company fired its controversial founder. the company appointed a new head of the board and adopted a shareholder rights plan otherwise known as a poison pill to prevent an investor from buying more than 10% of its stock. the clothing maker says that
move is not an attempt to deter bidders. shares is were up 6 1/2% to $1.14. it's worth mentioning american apparel is, well, you can see it there, it's a small cap stock. and facebook saw its shares rise to a record price today of $81.88. the all-time high driven in part by mobile advertising growth and the recent valuation of instagram its photography app. it bought that company for less than a billion dollars in 2012. citi now estimates it's now worth 35 billion. it closed well below that milestone -- facebook did, but still up $1.57 to 81.45. as we approach the new year, we look ahead not just to 2015 but to the next 25 years. what will the consumer of the future be like? and more importantly, how will they do everyday things like getting their groceries?
sar sarah ooizen has more on the future of food. >> reporter: with just a click, these designs are being printed into flavor-packed sugary treats. >> you can design anything that you imagine in your mind that you like to 3-d print in sweets all right inside her sugar lab, she and her team are developing new ways of printing edible products. >> it adds the wet ingredients to the dry ingredients just very precisely. so it builds up the objects in confections layer by layer. >> reporter: the goal, putting 3-d printers in bakeries, restaurants and one day next to the coffee machine next to your kitchen counter at home. >> i can see a day when a dad and his son are in the kitchen whipping up, you know, designing together, a dessert for a soccer game or chess tournament. >> create and then consumer.
it's something kroger ceo rodney mcmullen isn't sold on just yet. >> the thing that i keep wondering about is 3-d printing and will somebody really feel good about something that's food produced with 3-d printing even though it's to my taste profiles? >> wow, you think there's going to be a world where we 3-d print our food? >> i think it's possible. now whether it actually happens or not, i don't know. >> reporter: the hershey company is already experimenting with 3-d printing working with systems to print chocolate. and we're told others will be announced soon, but it's not just sweets, savory and spicy foods could be part of the equation in the future. >> i think this will be a huge part of the future of food and nutrition and companies that aren't interested in engaging with this technology are going to feel it at some point like they missed an opportunity. >> reporter: 3-d food printing is in its infassi. as far as revolutionizing food
production, mainly it's being used for decorative items, but nasa's printing pizzas for astronauts. and there is a company called natural machines working on foodini, eventually aimed at the consumer. but there's plenty of work to do. experimenting with ingredients and temperatures for food. watch it in 25 years. for "nightly business report" i'm sarah eisen. and up next, the sharing economy, how and why a sea change has arrived in the way many companies are doing . it may be the season of giving, but it is also the season of sharing. that means sharing designer dresses for holiday gatherings.
i share mine all the time. or maybe opening yours up to guests or sharing a list with strangers. sharon epperson has more. >> reporter: it's called the sharing economy, where consumers can rent anything from a car ride and designer dresses to vacation homes. >> i love the service. it's very convenient. >> you can find a way to, you know, kind of streamline the whole process of finding things and getting things to the right people, i'm sure it can save people a lot of money. >> i get it for way cheaper and i wear it once and send it back. >> reporter: a move away from purchasing an item through a company. instead technology can help consumers to connect with one another and rent items for only as long as they need. this type of collaborative consumption is the fabric of rent runway, a company that allows people to rent high end designer dresses for a fraction of the retail cost. >> we have dress, gown, accessory, clutches. >> this is what i like for the holiday. >> reporter: this is the new marquez za dress. we actually rent it here for
$135. >> reporter: this professor says these types of sharing services provide more than just cost savings. they facilitate sharing and experience. >> what's interesting is that it's also expanding the set of people that can get access to nice things. because if you look at the demographics of people who are using rent the runway, they're very different than the demograph ibs of the buyers of these high end apparels. >> reporter: people aren't only sharing party dresses. you can rent a spare bedroom or a vacant home from the current owner through services such as air bnb. >> it has over a million listings. the largest hotel chain in the world has 600,000 rooms. and even if you measure activity at bnb comparable to a large hotel chain, top in the world. >> reporter: ride sharing services such as uber and lyft are part of this peer-to-peer
economy. >> there are over 10,000 uber cars in new york city, there are 13,000 yellow cabs and uber's been here for two years. if you compare lyft to a yellow cab, you know, the quality of cars tends to be better. you can call them on your phones which as it becomes colder and colder becomes more and more valuable. and priced at roughly the same price as a taxi. >> from ride sharing to high-end apparel to renting a stranger's home, the sharing economy offers access and experiences for a fee. to consumers just like you. for "nightly business report," i'm sharon epperson. and finally tonight, $3 billion in cash prizes up for grabs in spain's christmas lottery today, it's known as el gordo, or the fat one, one ticket could cost as much as $25 but one person doesn't win the whole jackpot. thousands of winners split the money and that works out. a pretty good deal for a country
that has unemployment at 25%. >> indeed, lots of winners. >> that's "nightly business report" for tonight. thanks for joining us. >> have a great evening. .e'll hope to see you right here "nightly business report" has been funded in part by -- >> thestreet.com and action alerts plus where jim cramer and fellow portolio manager stephanie link share their investment strategies, stock picks and market insights. you can learn more at thestreet.com/nbr.
>> this is "bbc world news." funding of this presentation is made possible by the freeman foundation, newman's own foundation, giving all profits from newman's own to charity and pursuing the common good, kovler foundation, and mufg. >> build a solid foundation and you can connect communities for centuries. that's the strength behind good banking relationships, too. which is why, at mufg, we believe financial partnerships